Defining the Strategic Objective and the Competitor

A market challenger must first define its strategic objective. Most market challengers seek to increase their profitability by increasing their market shares. The strategic objective chosen depends on who the competitor is. In most cases, the company can choose which competitors it will challenge.

The challenger can attack the market leader - a high-risk but potentially high-gain strategy that makes good sense it' the leader is not serving the market well. To succeed with such an attack, a company must have some sustainable competitive advantage over the leader — a cost advantage leading to lower prices or the ability to provide better value at a premium price. In the construction

If you think fl irbus Industrie makes only one aircraft, maybe this will change your view.

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If you think fl irbus Industrie makes only one aircraft, maybe this will change your view.

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Airbus challenges the market lender, Boeing, by providing an ever-increasing range of aircraft.

Reebok confront their major competitor-with a unique cushioning system. Photography: Buggy G. Ripheatl equipment industry, Komatsu successfully challenged Caterpillar by offering the same quality at much lower prices, Glaxo became Europe's leading drug company by aggressively marketing Zantae, its anti-ulcer drug.21

The challenger can avoid the leader and instead attack firms its size, or smaller local and regional firms. Many of these firms are underfinanced and will not be serving their customers well. Several of the large beer companies grew to their present size not by attacking large competitors, but by gobbling up small local or regional competitors.

Thus the challenger's strategic objective depends cm which competitor it chooses to attack. If the company goes after the market leader, its objective may be to wrest a certain market share. Bic knows that it cannot topple Gillette in the razor market - it simply wants a larger share. Or the challenger's goal might he to take over market leadership. Compaq entered the persona! computer market late, as a challenger, but quickly became the market leader. If the company goes after a small local company, its objective may be to put that company out of business, The important point remains: the company must choose its opponents carefully and have a clearly defined and attainable objective.

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